USAID initiative to target secondary cities for development

The United States Agency for International Development (USAID) has launched an initiative to develop secondary cities in the country. According to USAID mission director Gloria Steele at the Philippine Business Conference in Manila, the Cities Development Initiative (CDI) will work strategically in selected cities to promote inclusive economic growth. "USAID's CDI forms part of the new partnership for growth agreement between the Philippines and the United States," she said. USAID will work with the Philippine Chamber of Commerce and Industry (PCCI) for the initiative, which views cities as economic growth hubs, serving as centers for industrial production and essential services, marketing and distribution points, and gateways for trade and investment that link the rural sector to the urban economy. Steele said that in the Philippines, growth is highly centralized in only two regions, which account for half of the country's gross domestic production. "The Philippines must develop other areas to disperse growth and create economic opportunities across the country," she said. Steele said that the CDI is an initiative of US President Barack Obama to promote broad-based and inclusive economic growth. The Philippines is one of only four countries selected for the project. Steele said that developing the cities would entail developing their infrastructure, improving their business climate, building their human capital base, and mitigating environmental problems—all of which require capital. "There currently is enough liquidity in the local capital market at relatively low interest rates but opening up or easing barriers to foreign investment could unlock pools of capital that will unleash new levels of growth," she said. USAID recently launched an eight-year, $35-million credit facility with the Bank of the Philippine Islands and BPI Family Savings Bank intended to encourage lending to small and medium enterprises in cities outside Metro Manila that were selected for the CDI. "We hope that this facility will expand access to capital for entrepreneurs to allow them to improve and expand their businesses," said Steele. — BM, GMA News